The University of California was on the hot seat Wednesday at the state Capitol as lawmakers demanded to know why so many out-of-state students are accepted ahead of California students with higher grades.

"One-third of the students the university admitted were non-resident students," State Auditor Elaine Howle testified at the Capitol.

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That revelation prompted an exchange from lawmakers, including Los Angeles Assemblyman Mike Gipson, who asked Howle if "the university had lowered their standards just so they could sell the seats of our in-state students to out of state students?"

Howle replied the seats were not for sale, but the audit numbers show nearly 16,000 students from out-of-state were admitted to UC campuses -- even though their test scores were inferior to California students.

"Their GPA score, their SAT score and their ACT score - across the board every single score for those 16 thousand students was lower than a California resident," Howle told KCRA 3.

UC officials offered this explanation.

"The enrollment of non-resident students has not displaced California residents," said Nathan Brostrom, UC's chief financial officer. "This was a financial decision."

It's a financial decision because non-resident students pay about $37,000 for tuition each year, or more than three times what California students pay at $12,000 annually, but the policy of accepting more non-residents to make up for funding cuts to the UC system is controversial.

UC Student Association President Kevin Sabo told lawmakers, "We should ensure that the University of California remains first and foremost the University for California."

The UC admissions office testified that it has accepted 15 percent more California students for the fall semester.

"Over the next several weeks we will admit thousands more," said Stephen Handel, UC's Associate Vice President for Undergraduate Admissions. "The lesson here is simple. When the state supports enrollment growth, UC responds."

At the Capitol, more than half a dozen UC students urged lawmakers to provide more state funding.

"I would like to see more students apply to UC," UC Davis student Dashon Barr said. "I think just more funding, more programs to go and help students give them the resources to apply to a UC."

UC is trying to recover from severe budget cuts during the Great Recession. In the 2011-2012 fiscal year, UC's budget took a $650 million hit from the General Fund. Howle was critical of the way UC responded.

"The legislature had to cut the UC’s budget by over $600 million," she told lawmakers. "And in that very same year, the UC provides a general salary increase across the board that was $639 million. Personally, as a taxpayer I have a problem with that."

Gov. Jerry Brown's budget plan for fiscal year 2016-2017 calls for $3.4 billion for the University of California from the state's General Fund.

The budget reflects last year's agreement between Brown and UC President Janet Napolitano for a 4 percent increase in the general fund, in exchange for no tuition or fee increases, according to Department of Finance spokesman H.D. Palmer.

At the University of California, more than half the students pay no tuition at all so the fight over funding and who gets admitted will be an ongoing battle. For the upcoming fall semester, UC has announced that at least 8,500 more Californians have been admitted to the university, compared to last year.